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Visualized: A Global Risk Assessment of 2021 And Beyond

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Visualized: A Global Risk Assessment of 2021 And Beyond

Risk is all around us. After the events of 2020, it’s not surprising that the level and variety of risks we face have become more pronounced than ever.

Every year, the World Economic Forum analyzes the top risks in the world in its Global Risks Report. Risks were identified based on 800+ responses of surveyed leaders across various levels of expertise, organizations, and regional distribution.

Which risks are top of mind in 2021?

The World’s Top Risks by Likelihood and Impact

According to WEF’s risk assessment methodology, all the global risks in 2021 fall into the following broad categories:

  • 🔵 Economic
  • 🟢 Environmental
  • 🟠 Geopolitical
  • 🔴 Societal
  • 🟣 Technological

It goes without saying that infectious diseases have now become one of the top societal risks on both metrics of likelihood and impact.

That said, environmental risks continue to dominate the leaderboard, accounting for five of the top 10 risks by impact, especially when it comes to climate action failure.

Several countries are off-track in meeting emissions goals set by the Paris Climate Agreement in 2015, while the pandemic has also delayed progress in the shift towards a carbon-neutral economy. Meanwhile, biodiversity loss is occurring at unprecedented rates.

RankTop Risks by LikelihoodTop Risks by Impact
#1🟢Extreme weather🔴Infectious diseases
#2🟢Climate action failure🟢Climate action failure
#3🟢Human environmental damage🟠Weapons of mass destruction
#4🔴Infectious diseases🟢Biodiversity loss
#5🟢Biodiversity loss🟢Natural resource crises
#6🟣Digital power concentration🟢Human environmental damage
#7🟣Digital inequality🔴Livelihood crises
#8🟠Interstate relations fracture🟢Extreme weather
#9🟣Cybersecurity failure🔵Debt crises
#10🔴Livelihood crises🟣IT Infrastructure breakdown

As for other risks, the prospect of weapons of mass destruction ranks in third place for potential impact. In the global arms race, a single misstep would trigger severe consequences on civil and political stability.

New Risks in 2021

While many of the risks included in the Global Risks Report 2021 are familiar to those who have read the editions of years past, there are a flurry of new entries to the list this year.

Here are some of the most interesting ones in the risk assessment, sorted by category:

Societal Risks

COVID-19 has resulted in a myriad of knock-on societal risks, from youth disillusionment and mental health deterioration to livelihood crises. The first two risks in particular go hand-in-hand, as “pandemials” (youth aged 15-24) are staring down a turbulent future. This generation is more likely to report high distress from disrupted educational and economic prospects.

At the same time, as countries prepare for widespread immunization against COVID-19, another related societal risk is the backlash against science. The WEF identifies vaccines and immunization as subjects susceptible to disinformation and denial of scientific evidence.

Economic Risks

As monetary stimulus was kicked into high gear to prop up markets and support many closed businesses and quarantined families, the economic outlook seems more fragile than ever. Debt-to-GDP ratios continue to rise across advanced economies—if GDP growth stagnates for too long, a potential debt crisis could see many businesses and major nations default on their debt.

With greater stress accumulating on a range of major industries such as travel and hospitality, the economy risks a build-up of “zombie” firms that drag down overall productivity. Despite this, market valuations and asset prices continue to rise, with equity markets rewarding investors betting on a swift recovery so far.

Technological Risks

Last but not least, COVID-19 has raised the alert on various technological risks. Despite the accelerated shift towards remote work and digitalization of entire industries, the reality is that digital inequality leaves those with lower digital literacy behind—worsening existing inequalities.

Big Tech is also bloating even further, growing its digital power concentration. The market share some companies hold in their respective sectors, such as Amazon in online retail, threatens to erode the agency of other players.

Assessing the Top 10 Risks On the Horizon

Back in mid-2020, the WEF attempted to quantify the biggest risks over an 18-month period, with a prolonged economic recession emerging on top.

In this report’s risk assessment, global risks are further classified by how soon their resulting threats are expected to occur. Weapons of mass destruction remain the top risk, though on a much longer scale of up to 10 years in the future.

RankRisk%Time Horizon
#1🟠Weapons of mass destruction62.7Long-term (5-10 years)
#2🔴Infectious diseases58Short-term risks (0-2 years)
#3🔴Livelihood crises55.1Short-term risks (0-2 years)
#4🔵Asset bubble burst53.3Medium-term risks (3-5 years)
#5🟣 IT infrastructure breakdown53.3Medium-term risks (3-5 years)
#6🔵Price instability52.9Medium-term risks (3-5 years)
#7🟢Extreme weather events52.7Short-term risks (0-2 years)
#8🔵Commodity shocks52.7Medium-term risks (3-5 years)
#9🔵Debt crises52.3Medium-term risks (3-5 years)
#10🟠State collapse51.8Long-term (5-10 years)

Through this perspective, COVID-19 (and its variants) remains high in the next two years as the world scrambles to return to normal.

It’s also clear that more economic risks are taking center stage, from an asset bubble burst to price instability that could have a profound effect over the next five years.

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40 Years of U.S. Wildfires, in One Chart

Wildfires are blazing across the U.S with unprecedented intensity. Here is how activity has evolved over four decades.

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The following content is sponsored by Carbon Streaming

Note: This infographic contains forward looking information based on current expectations and beliefs of Carbon Streaming Corporation. For further information about the risks, uncertainties and assumptions related to such forward looking information, please see their legal notice.

40 Years of U.S. Wildfires, in One Chart

Wildfires are becoming more intense and widespread—largely due to rising temperatures caused by climate change. 

What’s more, experts predict a whopping 50% surge in wildfires by 2100.

We partnered with Carbon Streaming to illustrate four decades (1983–2023) of wildfire activity in the U.S. Let’s dive in.

The Evolution of Wildfires Over Time

The data we used comes from the National Interagency Fire Center and highlights the number of wildfires that occurred between 1983 and 2023, along with the average acres burned over the same time period. The 5-year rolling average was calculated based on the current year plus the preceding four years.

As the table below shows, the total area burned across the U.S. in 2023 was significantly below average, and the number of wildfires was slightly below average due in part to cooler weather conditions.

YearNumber of WildfiresAcres Burned 5-Year Rolling Average
202356,5802,693,9106,436,687
202268,9887,577,1837,651,404
202158,9857,125,6438,141,184
202058,95010,122,3367,818,055
201950,4774,664,3647,818,617
201858,0838,767,4927,604,867
201771,49910,026,0866,715,278
201667,7435,509,9956,575,308
201568,15110,125,1497,215,583
201463,3123,595,6135,875,098
201347,5794,319,5466,340,332
201267,7749,326,2386,534,917
201174,1268,711,3676,535,278
201071,9713,422,7246,767,754
200978,7925,921,7867,821,087
200878,9795,292,4688,256,305
200785,7059,328,0457,989,980
200696,3859,873,7457,561,314
200566,7538,689,3896,300,747
200465,4618,097,880*6,041,568
200363,6293,960,8425,547,210
200273,4577,184,7125,020,983
200184,0793,570,9114,155,432
200092,2507,393,4934,654,449
199992,4875,626,0933,543,860
199881,0431,329,7043,233,357
199766,1962,856,9593,326,931
199696,3636,065,9983,169,525
199582,2341,840,5462,547,041
199479,1074,073,5793,103,256
199358,8101,797,5742,654,002
199287,3942,069,9293,296,346
199175,7542,953,5783,371,819
199066,4814,621,6213,324,936
198948,9491,827,3102,979,841
198872,7505,009,2902,844,061
198771,3002,447,2962,106,936
198685,9072,719,162N/A
198582,5912,896,147N/A
198420,4931,148,409N/A
198318,2291,323,666N/A

*2004 fires and acres do not include state lands for North Carolina

What’s the impact of the increasing burned areas and severity of wildfires over time? 

Simply put, when wildfires burn, they release smoke and gas into the air which makes the Earth warmer, making it easier for more wildfires to start and spread. This cycle is often referred to as the fires and climate feedback loop, and is the reason why experts believe that wildfires will only continue to worsen.

Wildfire Havoc in the West

2023 marked a year of severe wildfire destruction on the West Coast and in Hawaii. The Maui wildfires in August, for example, led to the destruction of 2,308 structures and at time of writing, 5,000 residents are still displaced six months later. Additionally, the cost of rebuilding Maui could exceed $5 billion and take several years.

Post-wildfire restoration is a critical piece of climate change mitigation, particularly in the states that need it the most. 

What Can Be Done?

In partnership with Mast Reforestation, Carbon Streaming is advancing its pipeline of post-wildfire reforestation projects in Western U.S. states. 

To date, Carbon Streaming has entered into carbon credit streams to provide funding for three reforestation projects—Sheep Creek in Montana and Feather River and Baccala Ranch in California.

Mast Reforestation’s unique approach combines proven reforestation practices with new technology to regrow resilient, climate-adapted forests. Want to know more?

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